Pernod Misses Third-Quarter Sales Estimates, Raises Year Target

(Bloomberg) -- Pernod Ricard SA raised its forecast of full-year earnings growth, shrugging off a slowdown of its sales growth in the third quarter.

• The company raised its profit-growth target to about 8 percent from a range of 6 percent to 8 percent.
• Third-quarter organic sales growth was 2.5 percent. Analysts expected 3.1 percent.

Key Insights

• Sales slowed in the third quarter due to deteriorating conditions in France and a move to slash inventory levels in the U.S., issues that Pernod Ricard had already flagged.
• The distiller’s commitment to acquisitions of fast-growing, high-margin brands is helping it become more profitable as it boosts its presence in attractive categories. Earlier this week, the company acquired Malfy, a brand of flavored gins.
• The slower growth is the first time Pernod Ricard underperformed expectations since activist investor Elliott Management Corp. took a stake in the company late last year.

Market Reaction

• Pernod Ricard’s shares fell as much as 1.1 percent to 154.65 euros in Paris trading but later were about unchanged. The stock had gained 8.6 percent so far this year.

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• Read the statement.

To contact the reporter on this story: Thomas Buckley in London at tbuckley25@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, John J. Edwards III

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